Question 4 (1 point) Consider the market for money illustrated In the figure below. What is the effect of decreasing the money supply on interest rates? MS1 Interest Rate, i MD1 Quantity of Money, M (billions of dollars) Interest rates will decrease Interest rates will be unchanged. Interest rates will increase Interest rates could increase or decrease. Question 5 (1 point) What does the Fed target to achieve policy objectives? The money supply Interest rates. The demand for money. Government spending.Question 14 (1 point) Consider the economy represented by the aggregate supply-aggregate demand graph below, which is initially at a short-run equilibrium at point A. How could monetary policy be used to Improve the economy? LRAS1 Price level SRASI (GDP deflator, 2009 - 100) ADI GDP* GDP Real GDP (trillions of 2009 dollars) Contractionary monetary policy could be used to redo@ the rate of inflation. Expansionary monetary policy could be used to increase GDP to its potential. O Contractionary monetary policy could be used to reduce the unemployment rate. Expansionary monetary policy could be used to reduce prices. Question 15 (1 point) Suppose the Fed decreases the money supply with monetary policy. What effect will this have on the economy? Prices will decrease. Economic growth will increase GDP will increase. Taxes will increase MacBook AirQuestion 11 (1 point) Consider the economy represented by the aggregate supply-aggregate demand graph below, which is initially at a short-run equilibrium at point A. Suppose the Fed decreases the money supply. How would this affect the graph? LRASI Price level SRASI GDP deflator, 2009 = 100) PI ADI GDP* GDP Real GDP (trillions of 2009 dollars) The aggregate demand curve will shift to the left. The short-run and long-run aggregate supply curves wij shift to the right. The short-run aggregate supply curve will shift to the left. The aggregate demand curve will shift to the right. Question 12 (1 point) Consider the economy represented by the aggregate supply-aggregate demand graph below, which is initially at a short-run equilibrium at point A. How could monetary policy be used to improve the economy? LRAS: Price level SRAS GDP deflator. 2009 = 100) MacBook AirQuestion 5 (1 point) What does the Fed target to achieve policy objectives? The money supply. Interest rates. The demand for money. Government spending. Taxes. Federal debt. Stock returns. Question 6 (1 point) How could the Fed increase the supply of money? Raise the discount rate Buy treasury securities. Decrease the demand for money. Raise the reserve requirement. Question 7 (1 point) Consider the market for money illustrated in the figure below. Suppose the Fed conducts expansionary monetary policy. How will this affect the market for money? Interest Rate.() The short-run aggregate supply curve will shift to the right. )The long-run aggregate supply curve will shift to the left. Question 19 (1 point) With the onset of COVID-19, the Fed, led by Fed Chairman Jerome Powell, lowered its target interest rate (the federal funds rate) by 1.5 percentage points, to a range of 0.00-0.25 percent. This was done with 2 rate cuts during March 2020. Consider the aggregate demand-aggregate supply diagram below, which represents the macroeconomy. Suppose the market is initially (with the onset of COVID) at an equilibrium at point A. What effect will the Fed's actions have on this economy? LRASI Price level SRASI (GDP deflator 2009 - 100) PI AD GDP, GDP Real GDP (trillions of 2009 dollars The rate of economic growth will increase. Unemployment will increase The rate of inflation will decrease. Employment will decrease. MacBook AirQuestion 2 (1 point) How could the Fed Increase interest rates? Sell treasury securities. Raise tariffs. Lower the discount rate. Lower the reserve requirement. Question 3 (1 point) Consider the market for money illustrated in the figure below. What is the effect of increasing the money supply on interest rates? Quantity of Money, Mobil Interest rates will decrease. Interest rates will remain unchanged Interest rates will increase. Interest rates could increase or decrease. Question 4 (1 point) Consider the market for money illustrated in the figure below. What is the effect of decreasing the money supply on interest rates? MacBook AirQuestion 7 (1 point) Consider the market for money illustrated in the figure below. Suppose the Fed conducts expansionary monetary policy. How will this affect the market for money? MSI Interest Rate. i MI Quantity of Money, MI Chillion The money demand curve will shift to the left. The money demand curve will shift to the right. The money supply curve will shift to the left. The money supply curve will shift to the right. Question 8 (1 point) Consider the market for money illustrated in the figure below. What is the effect of the Fed buying treasury securities? Interest Rate. -RQuestion 17 (1 point) Consider the economy represented by the aggregate supply-aggregate demand graph below, which is initially at a short-run equilibrium at point A. Suppose the Fed decreases interest rates. How would this affect the graph? LRAS1 Price level SRASI (GDP deflator. 2009 = 100) PI AD GDP, GDP+ Real GDP (trillions of 2009 dollars) The aggregate demand curve will shift to the left. The long-run aggregate supply curve will shift to the right. The short-run aggregate supply curve will shift to the right. The aggregate demand curve will shift to the right. Question 18 (1 point) With the onset of COVID-19, the Fed, led by Fed Chairman Jerome Powell, lowered its target interest rate (the federal funds rate) by 1.5 percentage points, to a range of 0.00-0.25 percent. This was done with 2 rate cuts during March 2020. Consider the aggregate demand-aggregate supply diagram below, which represents the macroeconomy. Suppose the market is initially (with the onset of COVID) at an equilibrium at MacBook AirQuestion 18 (1 point) With the onset of COVID-19, the Fed, led by Fed Chairman Jerome Powell, lowered its target Interest rate (the federal funds rate) by 1.5 percentage points, to a range of 0.00-0.25 percent. This was done with 2 rate cuts during March 2020. Consider the aggregate demand-aggregate supply diagram below, which represents the macroeconomy. Suppose the market is initially (with the onset of COVID) at an equilibrium at point A. What effect will the Fed's actions have on this graph? IRAS, Price level SRAS GDP deflator. 2009 - 100) GDP GDP Real GDP (trillions of 2009 dollars) The aggregate demand curve will shift to the left. The aggregate demand curve will shift to the right. The short-run aggregate supply curve will shift to the right. The long-run aggregate supply curve will shift to the left. Question 19 (1 point) With the onset of COVID-19, the Fed, led by Fed Chairman Jerome Powell, lowered its target interest rate (the federal funds rate) by 1.5 percentage points, to a range of 0.00-0.25 percent. This was done with 2 rate cuts during March 2020. MacBook Air\fQuestion 16 (1 point) Consider the economy represented by the dynamic aggregate supply-aggregate demand graph below, which is initially at a short-run and long-run equilibrium at point A in year 1. The economy is at a short-run equilibrium in year 2 at point B. How could monetary policy be used to improve the economy in year 2? LRAS, LRASz Price level SRAS, (GDP deflator. SRAS 2009 - 100) 12 P2 15 AD2 ADI GDP GDP; GDP Real GDP (trillions of 2009 dollars) Expansionary monetary policy could be used to increase employment. Contractionary monetary policy could be used to lower unemployment. Contractionary monetary policy could be used to increase real GDP to potential GDP. Expansionary monetary policy could be used to decrease the rate of price inflation. Question 17 (1 point) Consider the economy represented by the aggregate supply-aggregate demand graph below, which is initially at a short-run equilibrium at point A. Suppose the Fed decreases interest rates. How would this affect the graph? LRAS, Price level SRAS (GDP deflator. MacBook AirQuestion 10 (1 point) Suppose the Fed increases the money supply with monetary policy. What effect will this have on the economy? Prices will decrease. Employment will increase. Unemployment will increase. Government debt will decrease. Question 11 (1 point) Consider the economy represented by the aggregate supply-aggregate demand graph below, which is initially at a short-run equilibrium at point A. Suppose the Fed decreases the money supply. How would this affect the graph? LRASI Price level SRASI GDP deflator. 2009 = 100) P ADI GDP. GDP Real GDP (trillions of 2009 dollars) The aggregate demand curve will shift to the left. The short-run and long-run aggregate supply curves will shift to the right. )The short-run aggregate supply curve will shift to the left. MacBook Air